Asked by Paula marques on Apr 26, 2024
Verified
Suppose the only three existing manufacturers of video game players signed a written contract by which each agreed to charge the same price for products and to distribute their products only in the geographical area assigned them in the contract.This best describes:
A) cost-plus pricing.
B) multiproduct pricing.
C) a cartel.
D) price leadership.
Cartel
An agreement among competing firms to control prices or production, typically to reduce competition and increase profits illegally or unethically.
Cost-Plus Pricing
A pricing strategy where the selling price is determined by adding a specific markup to a product's cost.
Multiproduct Pricing
Pricing strategies adopted by companies that sell multiple products and seek to maximize overall profits by considering cross-product price elasticity and cost structures.
- Investigate the significance and ramifications of cartels, including their creation, preservation, and impacts on market performance and pricing.
Verified Answer
RG
Reymundo GutierrezMay 01, 2024
Final Answer :
C
Explanation :
The scenario describes a cartel, which is an agreement between competing firms to control production, pricing, and marketing of a product or service. The three manufacturers agree to charge the same price and limit their distribution to specific geographic areas, which is a violation of antitrust laws.
Learning Objectives
- Investigate the significance and ramifications of cartels, including their creation, preservation, and impacts on market performance and pricing.